Do Builders have a duty of care to the homeowner when renovating?

In Renovators by G G

Seems an odd question to ask. Of course builders have a duty of care. Builders care about their clients…and any employees or sub-contractors on the books. It is the builders’ duty to fulfil any contract they enter into, as is the clients duty to pay the contract out in completion. Builders should already be aware that when, push comes to shove, the buck stops with the builder for all pf the building decisions made. There have been a number of adverse tribunal decisions where the builder has completed works which do not comply with the Building Code at the insistence of the client or their agent, ie, architect. Even after the clients have accepted responsibility, in writing, the tribunal has ruled that the builder had a duty of care to advise the client the works could not, and would not, be carried out, even if it meant walking away from the job.

Consumers enter into contracts with builders because registered builders are qualified and experienced, industry professionals and clients look to builders to advise them properly in all matters pertaining to their project.

Major Renovations & Extensions

Are there any major insurance implications facing home owners when they enter into a contract with a builder for an extension? What are the statutory requirements for the builder? The builder is required to be properly registered and eligible to provide a statutory warranty on the works being carried out. No difference to building a new home. The builder needs to cover the works with construction and public liability cover, just in case something goes wrong. The construction & public liability insurance protects the builder against loss and the home owner, if damage occurs to the pre-existing property that is caused by the builder. It sounds straight forward enough.

What happens, though, when damage is caused to the owners existing property that is not caused by the building works or builders negligence? What happens if the owners’ home is burgled, catches fire or is flooded? Is the home owner covered? Well no, if the damage is not caused by the builder or builders’ negligence the home owner would have to claim from the Home & Contents insurance provider.

Home & Contents Exclusions

Industry fact – up to 95% of renovation cases, the existing home is NOT INSURED during the construction period! As frightening as this sounds, it does reflect the real situation for almost all extensions and renovations being undertaken. Up to 95% of the extensions under construction, there is NO Home & Contents cover on the existing family dwelling and therefore no public liability cover as well.

Home & Contents insurance is designed to cover an existing home against damage, loss or burglary. It is not designed as a construction insurance. Home & Contents insurance policies will, usually, cover the home owner for a limited amount of renovation work. But there are clear limits to what a policy will let them do.

What about contents? They are NOT covered!


Renovators Home & Contents insurance covers the renovation/extension, existing property, contents and public liability policy. It combines all the essential insurances relevant to the renovation or extension project. It ensures you, the builder, are covered, protecting our business, assets and lifestyle and at the same time ensuring the same protection for your client. Call AOBIS now for more information on 1300 850 131, email